As pessimism among retirees continues to grow, many are looking at ways to make ends meet in retirement and are finding reverse mortgages as a necessary alternative to support themselves. According to a new study entitled “The Retirement Abyss: America’s Seniors’ Search for Security” , one-in-four seniors believe they will not be able to cover their monthly expenses in retirement, such as housing and utilities, and nearly 20 percent believe that, without additional cash flow, they will have to give up their homes. The poll, conducted by Marttila Strategies on behalf of the National Reverse Mortgage Lenders Association, surveyed 1,800 seniors and their adult children.
Nearly eight percent of those surveyed preferred to remain in their own homes and seventy four percent of reverse mortgage borrowers in the survey described their use of a reverse mortgage as a positive experience. Seniors in the survey expressed that they understood the financial terms of the product very well (75%) and ninety percent felt no sales pressure as part of the reverse mortgage process.
“Without increased social security benefits, retirement funding will need to come from seniors’ own personal resources,” said Peter Bell, president of the National Reverse Mortgage Lenders Association (NRMLA). “In light of reduced stock and bond portfolios, seniors will have to consider other asset pools, including the use of home equity, to help fill this financial shortfall.”